Tags: Strathmore | Miller | Uranium | Prices

Strathmore CEO David Miller: Uranium Prices to Surge on Power-Plant Wave

By    |   Friday, 17 Feb 2012 07:19 AM

Uranium prices are due to surge as supply cannot meet demand, and that's even without factoring in new power plants coming on line, says David R. Miller, CEO and director of uranium miner Strathmore Minerals, which produces uranium in Wyoming and in New Mexico.

Furthermore, oft-touted power sources like natural gas and alternative energy have their setbacks as well, and soon the world will wake up to the clean attributes of nuclear energy.

"There are 440 operating nuclear power plants and there are 62 more under construction. The existing fleet consumes 180 million pounds of uranium per year. The existing miners produce about 140 million pounds a year. So there's a shortfall right now before we turn on one more nuclear power plant," Miller told Newsmax.TV in an exclusive interview.

Expect supply to fall at least in the U.S., when Russia halts uranium sales in 2013 when a contract expires.

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"There is a critical date coming up in the uranium market, and it's 2013, and that's when the Russian sales agreement ends."

Most of the uranium stems from former Soviet-era nuclear stockpiles.

"That nuclear fuel now powers one out of two nuclear reactors in the U.S. So of the 104 of our operating nuclear power plants, 52 of them, or the equivalent, are powered by former Russian weapons pointed at the U.S," he said.

Calls to rely on natural gas have risen due to the high costs of oil as well as the cheap cost of natural gas.

Natural gas prices are low, however they are subject to change.

A coal plant, like a nuclear plant, costs a lot to build, but it pollutes more than nuclear energy.

"On a construction plant basis, coal and a nuclear power plant are on the same order and magnitude of construction costs for the size of the plant being considered. Coal, of course, has issues with CO2 emission, nuclear power, of course, has issues with the regulatory people," Miller says

"So the capital costs are about the same. The cost of the coal versus the cost of the uranium is where the difference comes in. The cost of the coal is going to be several times what the cost of the fuel is for the nuclear power plant."

Green energy sources like solar or wind energy aren't cheap and cannot meet demand on their own.

"I think for the sake of the country, people have to recognize that nuclear power is the cleanest, greenest and most cost-effective way to make electricity," Miller says.

"Nuclear is far cheaper than solar, far cheaper than wave energy, far cheaper than geothermal, far cheaper than wind turbines — it just works."

Nuclear energy often conjures up images of Three Mile Island and more recently, the Fukushima power plant in Japan, which suffered heavy damage during the 2011 earthquake and tsunamis.

That may be unfair.

The tragedy in Japan was more of a natural disaster stemming from the earthquake and tsunamis, and not due to the plant's nuclear properties.

"Even in the chemical explosion that occurred in the plant, there may have been some slight injuries there, but from the radiation effects and things like that, there has really been no significant public harm done to people," Miller says.

"Is an area contaminated around those core, breached plants? Absolutely. But the amount that got into water, that dissipates rather quickly."

Uranium, meanwhile, will remain a solid investment, climbing well above its current levels of around $52 a pound.

On top of the existing fleet of power plants, China has plans to build many more, while South Korea India, Brazil and Russia have development plans as well.

"The world, especially the developing world, is going nuclear as fast as they can," Miller says.

"Frankly the long-term price for uranium right now is something over $60. It's not a great leap of faith to go up to $65 or even $70. I've seen some forecasters even predicting $80 a pound again."

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